Zig and Zag are available on the BBC iPlayer, but only 29% of children use it for on-demand viewing.
Photograph: BBC/Flickerpix Animations/Alienpix

The BBC is facing a crisis over its youth audience after admitting that young people are spending more time watching Netflix than all of its BBC TV services each week, and listening to more music on streaming services such as Spotify than BBC radio stations.

The corporation has traditionally dominated the UK TV and radio landscape but is having to reinvent the way it connects with media-savvy young audiences who are turning increasingly to digital services – mostly provided by US tech companies such as YouTube, Apple and Netflix – for entertainment and news.

The BBC said it had found that 16- to 24-year-olds spend more time with Netflix in a week than with all of BBC TV including the BBC iPlayer, despite the latter’s relative popularity with younger viewers.

“As the trend shifts towards on-demand viewing, the BBC risks being overtaken by competitors,” the BBC said in its annual plan published on Wednesday. “Maintaining the reach and time that audiences spend with our output is … difficult when they have so many other choices at their disposal. This challenge is most acute for young audiences.”

The rapid generational shift in viewing by younger users is dramatically highlighted when the BBC widens its analysis to include viewers a decade older, in the 16- to 34-year-old range. The corporation said that including this older age group rebalances the survey, bringing overall weekly viewing of BBC1, ITV and Netflix approximately even at about two hours a week.

The corporation also said that for the first time it had found in the final quarter of last year that 15- to 34-year-olds spent more time listening to streaming music services than all of BBC radio: five hours versus four hours 30 minutes a week.

“The global media landscape is going to be dominated by four, perhaps five, businesses on the west coast of America in the years to come,” said the director general, Tony Hall, in a speech on the BBC’s priorities over the next year. “Companies with extraordinary technical, financial and creative firepower. Does music streaming spell mortal danger to radio? Can iPlayer keep pace with a rapidly growing Netflix?”

The BBC said it was the very youngest age groups that the corporation was at most risk of losing touch with.

Tony Hall: ‘The global media landscape is going to be dominated by four, perhaps five, businesses on the west coast of America’. Photograph: Guy Levy/BBC

It found that more than 80% of children go to Google-owned YouTube for on-demand content, half to Netflix and only 29% to the BBC iPlayer. Children aged five to 15 spend more time each week online (15 hours and 18 minutes on average) than they do watching TV (14 hours). The average weekly reach of CBBC, once a dominant player in children’s TV, among six- to 12-year-olds has fallen dramatically, from close to 40% in 2011 to less than 25% last year.

In addition, the popularity of the traditional TV set is increasingly under threat, with 43% of 12- to 15-year-olds using their mobile phones to watch TV.

“This generation of children embody the digital transformation,” said the BBC. “They are the audience group that are changing fastest. Although TV continues to be the main platform for children’s viewing, what they consider to be ‘TV’ and how they access this is rapidly evolving.”

BBC News has also been hit by the youth exodus, with the amount of time 16- to 34-year-olds spend watching it down more than 10% in the past three years. For younger members of what is known as the C2DE demographic – the lower socio-economic groups as categorised by researchers – time spent watching is down by a fifth.

The corporation said over the next year BBC News was also aiming to redress a major imbalance after finding “significantly more young men than young women” interacting with its online services.

Hall also said a key focus would be tackling fake news.

“This year, we won’t just talk about the challenges and distortions of fake news: this year we’ll take them on directly,” he said. “We’re going to fight – publicly and globally – for news that people can trust and rely on.” He said fake news ate away at trust in the media – including the BBC – and blurred the lines between reality and so-called “alternative facts”.

At a grassroots level, the BBC said it was launching a national training programme in schools to help young people to “identify real news and filter out fake or false information”.

“It seems only a few short years ago that the BBC, ITV and Sky were thought of as the titans of British media,” said Hall. “But what about now: where does the BBC fit in to the new media world?”